Investment in Hu(wo)man Capital

My economics tutorial assigned a wonderfully informative and refreshing experimental study for our weekly reading just last week. In it, Robert Jensen and his team test the effect of increased availability of information involving job opportunities on investment in human capital in several randomly selected (to avoid bias within the experiment) communities in India. Are you ready for the unexpected, but much appreciated twist? The study targeted job opportunities available specifically to women.

Long project short, women between the ages of 18 and 28 saw a drastic decrease in unemployment, increase in average yearly earning, and, as a result, increased bargaining-power within the home. The change in the status of these women increased the value that society placed upon them. A trickle down effect ensued. Because these young women increased their worth (cringing at the thought that ones worth is financially determined), there was an increased investment in girls within these communities.

This increased investment in human capital was evidenced by a jump in school enrollment rates for girls between the ages of 6 and 15. Additionally, these communities saw an increase in the number of hours per week that girls, on average, spent on school work outside of the classroom. What struck me as particularly interesting was that health statistics for young girls also improved. Average BMIs increased, which lead, over the course of 4 years, to an increase in the average height of girls in these regions, and a decrease in pregnancy before the age of 19.

WOW! All of those improvements made to the standard of living of the female population just because of increased access to employment opportunity information. Jensen also reports relatively low costs of implementation of his program. I picked my brain to see how more of this could possibly be negative, and I came up with nothing. I would love to see global aid organizations implement for of these types of programs around the world… I’m looking at you World Bank, Clinton Foundation, Sangra, etc.

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3 thoughts on “Investment in Hu(wo)man Capital”

Lindiwe, this is great! I do think, however, that the effect does not “trickle down” so much as it grows from the “ground up,” from the women in their families and communities up to a national impact. Regardless, I agree that this study’s results are positive. Increased health and education and status at home, all for a fairly low capital investment? Can’t go wrong with that. Now, though, you’re right- this is only half of the story. Aid groups need to run with these findings. I think that the US government’s USAID Office of Gender Equality should itself create such programs. The country’s foreign aid is pretty generous. Surely a good chunk of that aid could go to programs that seem to have few costs and a myriad of benefits.

This is great! If you look at Kristof’s book “Half the Sky” you’ll notice how women’s financial worth is directly proportional to how well they get treated by their families, especially their in-laws. Some interested case studies in Pakistan were described. After a microfinance initiative (Kashf) allowed women in a particular community to set up their own businesses, their mother-in-laws/husbands stopped threatening to kick them out of the house/divorce them/ marry second wives. While we are aware that this isn’t ideal, we would rather be addressing the root problem which is making sure women get the respect they deserve regardless of financial position, it is a step forward. In a way it is a way for women to start calling the shots in these family situations. A lot of organizations have latched onto targeting women as their main clientele because they know that impact is greater there.